Good leaders buy low, sell high

Challenges in leadership and investing:

Plain common sense tells us we should buy when times are bad and sell when times are good. But how we actually behave couldn't be farther from that.

We find it comforting to buy during good times and sell during bad. Why? Partly because we take comfort in being part of the herd.

If everyone's buying, then there must be sense in it. And partly because we expect whatever times we're in, good or bad, to last forever. Seldom do we try very hard to see beyond the immediate horizon.

Yet that is exactly what good leaders are all about-being contrarians, perceiving what is distant and doing what is right rather than what everybody else is doing.

Thus a good leader is like a good investor. He buys low and sells high. An investor does this in the world of financial instruments to make a profit; a leader does it in conceptualizing and developing ideas.

When a good idea is born, it's usually like an underpriced stock, perhaps because it's ahead of its time or because the times are bad. But a leader supports it and adds value to it until the time comes for its fruition. He sees what isn't obvious in it and strives to create what isn't there yet at all, by betting on its hidden potential. He undertakes the act of converting something worthless in the present into something precious in the future. His actions are nothing but decisions to buy low and sell high.

What does this mean in a time like the present?

Buying low means looking into the future. True leadership is about committing your present to a future whose value appears low at the moment but you believe it can be high.

Visionary leaders see the potential in a thing before it's obvious. They look for what is not there, what has not been said, what has not been done, and they imagine how things could or should be. Buying low means defying the crowd. George Bernard Shaw wrote, "All progress depends on the unreasonable man." That means the true leader is an unreasonable man. A reasonable man adapts to the world; an unreasonable man tries to adapt the world to himself. He produces and supports ideas that go against the crowd, buying low, selling high, doing the opposite of what the world is doing-even when those ideas appear to most as bizarre, useless and even foolish.

Leadership takeaway: Leadership is the art of buying low and selling high. There is no better time to buy into an idea than when the times are bad.

Forbes.com